NBA owners and players are back at it, more than four hours into a Thursday meeting (as of this writing) following a 12-hour session on Wednesday.

Wednesday was the deadline day of David Stern’s “reset” offer — one that would almost certainly kill the season if the owners really stuck with it — but he said after the talks ended Wednesday that due to progress “we’ve stopped the clock

Progress must continue to be made Thursday so that the sides can end by saying they are confident of being able to bring an offer to the respective memberships — owners and players — by close of business Friday, said a person familiar with negotiations who requested anonymity because he was not authorized to go public.

If that does not happen, Stern will announce the owners’ offer has dropped to the 53-47 split and a hard salary cap — and that likely would trigger a domino effect that could end any chance for a season.

Some players and agents are sitting on the sideline right now with the signatures to start the process to decertify the union. If Stern goes to his reset offer, the players will start to try to decertify.

Through all that, the players will do their best JFK impression and ignore Stern’s new offer and deadline and keep negotiating. We’ll see then how the owners react to that.

But it comes down to this — if there is not a handshake deal by the end of business Friday things are going to get very ugly. Much worse than they have been. And they haven’t been good.

What stands in the way comes down to this — the Dallas Mavericks won the NBA title last season with the third highest payroll in the league, and the Lakers the two titles before that with payroll at the top of the league. Small market owners see that, see what LeBron James and Carmelo Anthony did — leaving smaller markets to play in bigger ones with more stars — and freaked out.

Small market owners want to tie the hands of big market owners to just spend. The players want those big market owners to have the means to spend if they want.

Union president Derek Fisher had made clear that, in return for that willingness to negotiate further on the economics, it was expected that the league relax its position on several system-related deal points — chiefly dealing with additional penalties for repeat offenders above the luxury tax, a prohibition of sign-and-trade transactions for tax teams, and the size, length and frequency of mid-level signings for tax teams.

The owners have said from the start — and Deputy Commissioner Adam Silver emphasized again last night — that they see the financial and system items as totally separate. You can’t trade one for the other in their eyes, even though that is essentially what they are doing.

The players want teams paying the luxury tax to be able to use the full mid-level exception at $5 million, the owners proposal calls for a mini mid-level of $2.5 million for tax paying teams they can only use every other year. Basically, the owners want to make it very hard for the Miami Heat to bring in good role players every year. The players think that if teams are willing to pay the tax to spend, they should be able to.

That is where it stands. The two sides will sit down in a room again at noon and try to clear those last hurdles.

Last time there was optimism about an NBA labor deal, David Stern was standing in the back of the union press conference joking with Billy Hunter, and the words “striking distance” were thrown around. Then it all blew up.

Wednesday night — really, Thursday morning — after 12 hours of talks that again led to optimism, both sides downplayed it. Stern was saying people should not read “optimism or pessimism” into anything and the players were talking about how much work was to be done.

It may blow up again, or this time the two sides may push through. But the attitude suggests the sides have learned the fragility of what they have and are trying hard to make it work. A. Sherrod Blakely of CSNNE.com had a good quote along these lines.

“Remember, they have to go back and sell this to their people,” one source said. “No matter what they agree on, those people, the owners and the players, are the ones who will decide if there’s a deal or not. They’re not going to be happy, or show signs of being happy, until this deal is done.”

If one side hypes what happens, saying it made big gains, that would make it more likely the other side’s constituency would try to shoot the deal down. So hype was nowhere to be found Thursday morning.

We don’t know what progress was made in the meeting. The players went into this negotiating session giving up more revenue — down to the 50/50 deal the owners wanted — but expecting some give on system issues in return. The owners are not giving it all up. Adrian Wojnarowski of Yahoo tweeted that progress was made on three of the five key system issues.

However, all those issues are interlocked with the revenue split tied in — pull on one loose thread and the whole thing comes apart. It’s fragile. It needs to be treated that way.

As he left the news conference early Thursday morning, after 12 hours of bargaining, Stern stopped in the crowded hallway to converse with union economist Kevin Murphy, who says he is trying to arrange his schedule to be here for the next session to start at noon.

Stern encouraged Murphy to show up, saying, “It will be a good day to be here.”

Don’t read much into that. But that doesn’t sound like a guy who think things will go badly Thursday. Just don’t expect Stern to sell the positives.

The NFL lockout went for 132 days and on the 132nd day of the NBA lockout the owners and players met for 12 hours but it was not enough to get a deal done. However, the two sides will get back at it on Thursday morning.

Progress was made on three of the five key system issues, Yahoo’s Adrian Wojnarowski tweeted. At their press conferences, both sides played down potential progress. Whatever happened, it was enough that NBA commissioner David Stern did not institute his threatened “rollback offer,” something that would set talks way back if not doom the season.

Neither side would give details after the meeting and both tried to sound neutral amidst multiple reports that there had been real progress.

“We’ve agreed that we have sort of stopped the clock and continue to negotiate, we’ve agreed to reconvene at noon tomorrow,” Stern said in a press conference broadcast on NBA TV….

“I would not read into this optimism or pessimism, we just continue to negotiate… nothing was worked out today.

Union President Derek Fisher said there was still a lot of work to be done.

“We spent a lot of time covering all the issues we have remaining, but we can’t say there was significant progress made today,” Fisher said….

“The fact that we don’t have a deal obviously let’s you know there’s still a lot of work to do on the system.”

The players had agreed to come down to the 50/50 split of revenues that the owners had wanted, but in exchange the players have expected a certain amount of give from the owners on system issues (such as the mid-level exception and other exceptions teams paying the luxury tax can use). The owners have said from the start — and Deputy Commissioner Adam Silver said again after these press conferences — that the owners see these issues as separate. Meaning give on the revenue does not change the system. Small market owners want a system that reins in big market teams. Both sides said there was no deal on the key system issues (regardless of what the leaks say), but if they spoke for 12 hours means there had to be some progress.

That’s not how negotiations really work, but both sides were tight lipped about how things really went or how close they really are.

But they will be back at it Thursday. Which is better than the alternative.

Everyone is cautious — we’ve all been here before. We’ve all been Charlie Brown running up to kick the football when Lucy (played by David Stern) pulls the ball away and we go flying through the air, crashing on our backs. Even writing this post feels like talking about a no-hitter in the eighth inning.

That said, there is a real vibe around that the NBA is close to a labor deal. Agents, front office types, pretty much everyone anyone talks to says there has been real progress, although how much depends on who you ask. It may not happen Wednesday — the two sides have met for more than nine hours as of this writing — but sources across the board see a deal as close. If we don’t see David Stern and Billy Hunter shaking hands Wednesday night (or early Thursday morning) it could happen before the weekend.

Everyone is cautious after watching the talks blow up again and again. Nobody will believe it until we see it. But it finally feels like a deal is close, and if that is the case we could have about a 60-game NBA season with games by Christmas. Which would be a great present for everyone.